[Commons-Law] Fighting Big Pharma in Little Digwal

[Ram]

Fighting Big Pharma in Little Digwal

By Stan Cox

Something to think about when taking your medicine

Digwal, India – Maliamma waved a Coke bottle at the government
official. "Go ahead—issue the permit! But first I want to see you
drink my well water!" Maliamma and her neighbors had traveled the 25
miles from their village of Digwal, in the state of Andhra Pradesh,
India, to the district capital Sangareddy for a public hearing. At the
hearing, an export-oriented pharmaceutical company was proposing to
build a factory only a couple of miles from Sangareddy.

The visitors from Digwal knew firsthand what kind of neighbor a
bulk-drug factory can be, and they were determined that Sangareddy not
suffer the same fate. Joining forces with local residents and
businesses, they made it a pretty uncomfortable meeting for company
representatives, who eventually hightailed it from of the room after
signing an agreement to get out and stay out of the Sangareddy area.

That hearing, in March, 2001, was one in a string of victories for the
people of Digwal—a winning streak that by 2005 may have halted further
pollution of their water and land by the factory across the road from
their village.

In this 50-mile-long stretch of rural India west of Hyderabad, the
country's fifth largest city, almost 40 percent of the country's bulk
pharmaceuticals are produced (a large proportion of them for export).
The progress the the people of Digwal have made in protecting
themselves against the industry's wastes puts them in a league of
their own. Here, the more typical experience is that of the Patancheru
industrial area about 30 miles east of Digwal, where toxic effluents
from a myriad of drug factories continue to plague more than a dozen
villages.

But nobody's celebrating in Digwal. Residents and their legal
representatives say that the groundwater remains badly polluted and is
ruining their crops and their health. The factory's current owners say
they are currently using state-of-the-art technology to control
pollution, and that they have gone the extra mile to improve the lives
of Digwal's residents. Government authorities say that the factory
used to be a serious polluter, but, thanks to tough enforcement,
that's all in the past. What's past is past, say the factory owners,
and, as we will see, they may have excellent reasons for feeling that
way.

Sorting through all the claims and counter-claims are the state's High
Court, various blue-ribbon committees, and even the US Food and Drug
Administration (FDA).

Digwal and the world

"I'm no activist," says C. Shailaja, the Sangareddy attorney who has
been representing Digwal's residents for almost seven years. "But when
the people from Digwal first told me their story, I knew we had to do
something." Back in 1998, she and some colleagues set up a one-day
"camp" in Digwal to provide information on legal services. Such camps
are routine, but at this one, Shailaja was thronged by more than 100
people who claimed that Global Drugs Ltd., owner of a drug factory
just across National Highway 9 from their village, had contaminated
their groundwater, ruined their crops, and wrecked their health.
Before long, Shailaja and the villagers had filed a case against the
factory's owners—a case that's currently before the state's High
Court.

The village has 6000 or so residents, most of them from the lowest
rungs of India's caste hierarchy. The pharmaceutical plant, now owned
by Nicholas Piramal India Ltd. (NPIL) of Mumbai (formerly Bombay),
manufactures bulk drugs—technically, "active pharmaceutical
ingredients"—that are used in producing pills, capsules, and other
medical products.

NPIL is India's second-largest pharmaceutical company, with numerous
factories producing a complete line of finished products as well as
bulk drugs. Judging from its published "shareholding pattern", between
21 and 30% of its stock is foreign-owned. The company has a branch
office in New York and joint ventures with a wide range of Western
drug companies in the U.S., the U.K., Switzerland, and Italy.
Approximately 70% of the Digwal plant's production goes into export
markets.

India's pharmaceutical manufacturers will tell you that the best thing
we in the West can do for the environment in places like Digwal and
Patancheru is to keep swallowing our medicine. The more emphasis that
India puts on exports, the drugmakers say, the greater the scrutiny
they receive from Western regulators. But so far, in Digwal and the
villages around Patancheru, the progress made against pollution has
been largely the result of agitation and court action by local people
who can no longer swallow their own well water.

Rajarathnam, a native of Digwal, was one of those who approached
Shailaja for help at the legal aid camp. He has been a thorn in the
side of the factory's owners since 1995, secretly videotaping the
dumping of effluents (he's a videographer by vocation), speaking out
on Digwal's pollution problem, and even helping organize a theatrical
troupe to spread the word to other villages. He says that a frustrated
company official once told him, "Stop complaining! We're saving lives
all over the world!" Another shouted, "What's the problem? Your
village is becoming world-famous. People are saying, 'We're grateful
to Digwal – that's where our medicines come from!'"

The view from the village

Digwal residents told me that since it was built in the early 1990s,
the drug plant has discharged wastes into open streams during the
monsoon season and has dumped into deep, open wells years round. They
claim to have seen barrels of toxic waste buried, with trees planted
over the top. They say that chemical analyses have shown their
groundwater to be too contaminated for drinking, bathing, or even
irrigation, and that it's making them sick. Farmers told me they have
had to stop cropping large parts of their irrigated land because of
what they call the "chemical water".

(Pharmaceutical manufacturing involves a host of hazardous inputs,
solvents, and by-products. For newly built drug factories in the
United States, the Environmental Protection Agency puts limits on
concentrations of some 32 different toxic compounds in their
effluents.)

There is little question that Global Drugs, which owned the plant
until sometime in 2003, was a big-time polluter. In 1998, a state
court concluded that "allegations to the effect that by reason of
discharge of the industrial effluents, the agricultural lands have
been affected stands beyond reasonable doubt." I saw one government
analysis of water from a Digwal well in that same year that concluded,
"Sample is not suitable for potable or irrigation purposes."

A district judge wrote in 1999, "I have personally visited the
premises of Global Drugs . . . This is a highly polluting industry."
He called on the state Supreme Court to order compensation for the
affected farmers. A 1999 court order addressed to Global Drugs noted
that "effluents have formed a cesspool which is causing surface and
groundwater pollution, and your effluent treatment capacity is not
adequate."

An official of the Andhra Pradesh Pollution Control Board, who asked
not to be identified, told me, "In those years, Global Drugs was
allowed to discharge its effluents on the land. But when NPIL took
over the plant a couple of years ago, that stopped. The Board would
not allow them to re-open the facility until its effluent treatment
capacity was upgraded and its wastes were disposed of properly."

He continued: "And these days, as soon as anyone tries to dump wastes
in this area, we get a call, immediately, from a citizen. Everyone is
very pollution-conscious now."

NPIL: a white knight?

Global Drugs was strictly minor league: a small, unprofitable local
outfit. The plant's new owner, NPIL, is a billion-dollar-plus company
that can afford to invest ample resources in pollution control—and
they appear to have done just that. Manoj Agarwalla, General Manager
for Finance for NPIL's Digwal operation, says that when it comes to
preventing pollution, his is a model company. "This plant has an
unconditional seal of approval from the FDA in the United States. Last
May, we received an award from the Pollution Control Board. We're on
the shortlist for an award from the National Safety Council of India.
Around 8 or 9% of our total investment goes to safety, health, and
environmental protection.

"Any day of the week, we'll have foreign visitors coming in.
Representatives of multinational companies are a dime a dozen around
here. Given that, how could we be dumping toxic wastes?"

But Agarwalla goes further. He says that his factory has never dumped
its wastes—not even when it was owned by the notorious Global Drugs.
In his view, the villagers are simply putting the squeeze on a rich
corporation, and their very poverty gives them a big advantage: "Look,
these are people who have so little, they have nothing to lose. So
they file a case, see what they can get, and if they come up with
nothing in the end, it's no big deal—for them. But I am forced to
spend a lot of time and money to prove myself innocent."

He adds, "We have spent close to $2 million on waste treatment, health
and safety measures, and supplying safe water to Digwal." In 2000,
under a court order, Global Drugs started hauling drinking water to
Digwal in tanker trucks. Now, for an hour each morning, NPIL pipes
water directly into the village from wells outside the allegedly
contaminated area, at a huge expense.

Agarwalla says the company provides potable water even though—he
claims—the courts found the undrinkability of Digwal's groundwater to
be "not directly attributable" to the drug plant. "We do it because we
want to be a good neighbor. We do a lot for them. Last Independence
Day, we even distributed sweets to every single schoolchild in
Digwal."

(Shailaja notes dryly that while NPIL was not legally compelled to
pass out candy, the courts do continue to require that it furnish
clean water.)

I toured NPIL's Digwal installation with Agarwalla and other managers.
Their pollution-control infrastructure, which includes three
independent effluent treatment facilities, is impressive indeed.
Incineration is done at high temperature with rapid cooling to prevent
dioxin formation. Smokestacks are all scrubber-equipped. Liquid
effluents run through channels and ponds lined with high-tech,
impervious polymers.

Organic wastes go into large tanks where they are broken down
anaerobically by bacteria, producing useful biogas fuel in the
process. Heat, water, and steam are all conserved and recycled. Both
solid and liquid wastes are hauled to government-approved facilities
after treatment.1

S.R. Mittal, NPIL's General Manager for Safety, Health, Hazards, and
Environment, oversees all this activity. He is absolutely fervent
about pollution control. He lives and breathes his profession
(breathes, literally—the air that assaults the nostrils and lungs
anywhere near the effluent treatment facilities is strong stuff
indeed.) Let a single toxic molecule slip his grasp, and he'll take it
as a personal failure. The chief concern of other drug industry people
I have spoken with appears to be their corporate image, but Mittal is
different. He's precisely the kind of person I'd want to hire were I
in charge of a company truly committed to environmental
responsibility.

At the time of my visit in January 2005, the management was preparing
for a visit by FDA officials from Washington, who would recommend
whether or not the plant's permit to export to the U.S. should be
renewed. I'm no expert, but from what I saw and heard at NPIL, I
expected the permit to be issued promptly.

A phantom report … and a phantom company?

But what about the villagers, and their ailments, and their crops? Is
their water and soil still polluted by past or even present-day
dumping? Or, as Agarwalla maintains, are they just greedy? Maybe
they're victims of mass paranoia?

There is a document that could go a long way toward clearing up the
controversy: a report by a committee of experts appointed by the state
High Court to study the situation in 2002-2003. Almost everyone I
spoke with, on both sides of the dispute and in the middle, mentioned
the report's findings and leaned on it for support. But no one I spoke
with had a copy of the report or had ever even seen a copy.

Agarwalla says the report proves that Digwal's water is no longer
polluted, and it recommends that the Court award no compensation to
farmers.2 But neither he nor his fellow NPIL managers have actually
seen the report. The folks at the state's Pollution Control Board
office in Sangareddy said they don't have a copy, and more senior
officials at the Board's headquarters couldn't provide one either.
Shailaja hasn't seen the report, but doubts its reliability because,
she alleges, committee members were too chummy with the company
people. (NPIL denies this.) In her capacity as a legal representative
of the villagers, she requested a copy, but never got one.3

And, of course, no one in Digwal has seen the report. One farmer,
Nagarathnam, told me, "People come all the time and take water
samples, but they never come back to show us any results."

A Pollution Control Board official in the area says the water supplies
are fine now, but he could show me no data. Completion and publication
of a comprehensive survey, with full chemical analyses of Digwal's
water sources, would answer many questions. Agarwalla would like to
see such a study, but he emphasizes, oddly, that it should be done
only after the court case is resolved.

In the villagers' view, present-day water samples wouldn't tell the
whole story anyway. They say the company already owes them for their
decade of hardship. Here, a precedent—far more ghastly but still a
precedent—comes to mind. Dow Chemical bought the Union Carbide
Corporation in the 1990s . Thousands of families still seeking
compensation for Carbide's deadly 1984 gas leak in Bhopal, India claim
that Dow can't have acquired Carbide's assets without also taking
responsibility for the Bhopal carnage—Carbide's biggest unresolved
liability by far. Does NPIL likewise owe the residents of Digwal for
what its predecessor did to them?

Clearly, Agarwalla's unconvincing assertion that Global Drugs never
dumped effluents is meant to head off compensation demands based on
pollution that occurred before NPIL came on the scene. But the
villagers say there's a bigger reason for NPIL to want to forget the
past. As Rajarathnam puts it, "The name they put on the signs out
front doesn't matter. They keep changing the factory's name just to
avoid responsibility." That assertion may be inaccurate in a legal
sense, but there may also be some truth in it. It turns out that the
plant has changed hands more than once in its twelve-year lifetime.
Global Drugs was the third in a series of owners, having acquired the
plant from none other than Nicholas Piramal India Ltd.4

It's tempting to speculate, so let's do just that: Was Global Drugs
created to supply NPIL with bulk drugs while keeping the big company's
good name untarnished by pollution? (Some pharmaceutical companies in
Patancheru have been accused of such shell games.) And, faced with
villagers' protests and a government crackdown, did NPIL make a virtue
of necessity and convert the plant into clean, green facility that can
now freely export into regulated markets?5

At this point, it is left to the High Court to weigh whatever evidence
it has gathered and decide whether NPIL is responsible for past
pollution by the plant—whatever the past connection (or lack thereof)
between NPIL and Global Drugs.

When it comes to the cost of patented prescription drugs in the United
States, the sky's the limit. But in the global bulk drug market, price
competition is fierce, and every dollar or rupee not spent on
pollution control gives a company a bit more room to maneuver. The
people of Digwal have fought hard to stop such corner-cutting in their
own backyard, and they appear to have succeeded. But they plan to keep
pushing; they're still seeking recompense for a decade's worth of
poisoned water.

So, when drug-company officials tell Rajarathnam that drugs being made
in Digwal are improving the health of tens of millions of people, this
is his retort: "What? So are you doing this for free? And how many
rupees are the lives of 6000 people in Digwal worth to you?"

Stan Cox is a plant breeder and writer who lives in Salina, Kansas. He
lived in Hyderabad, India in 1980-82 and 1996-2000 and just completed
a two-month trip there. Translation by Priti Cox during interviews is
deeply appreciated. He can be reached at: t.stan at cox.net

***************

Notes:

1. NPIL's daily output of liquid effluents fills 14 or so tanker
trucks, each with a 10,000 liter capacity. They transport those wastes
20 miles to a Common Effluent Treatment Plant (CETP) in Patancheru
that handles wastes from all of the area's drugmakers. After
treatment, NPIL management says, pollutant concentrations in the
liquid wastes are less than half the legal upper limit. A 2003
court-ordered study in which repeated samples were taken from tanker
trucks arriving at the CETP from 35 different factories confirms the
claim that NPIL's treated effluents have concentrations much lower
than the limit for raw sewage (the standard that applies to wastes
brought to the CETP). But a single sample of "treated effluent"
obtained during the study on a surprise visit to the factory itself
exceeded that upper limit.

2. Agarwalla said the committee recommended no farmer compensation
because records show that the land in question had lain idle before
Global Drugs allegedly polluted it: "Those guys were producing zilch
then, and they are producing zilch now, and they want to be paid fo
it." Shailaja laughs off that argument: "The committee members were
looking at land that had been taken out of irrigated production in the
dry season precisely because the water was too polluted to use. And
they concluded that the farmers were just lazy." She asks the obvious
rhetorical question: How had more than a thousand families in a
village surrounded by nothing but open countryside been surviving if
they weren't farming?

3. One Pollution Control Board official told me that the report is
evidence in the pending court action against NPIL and therefore
unavailable. But as a foreigner with no legaI standing here at all, I
had little trouble obtaining a 2004 report by a similar
High-Court-designated committee that had investigated the pollution
situation in nearby Patancheru. That case is also still pending.

4. I had read and had been told that NPIL "acquired" Global Drugs two
years previously, and in the interview questions I put to Agarwalla,
it would have been obvious to him that I believed that NPIL's role in
the Digwal saga began only at that time. In his answers, Agarwalla
said nothing to cause me to doubt that assumption. Subsequently, a
person knowledgeable about the matter told me, "NPIL or Global
Drugs—it's all the same thing." He told me that it had been an NPIL
plant, then they formed Global to take it over, then they after a few
years, they took it back over. When I asked one Pollution Control
Board official—a vigorous defender of NPIL who asked not to be
named—about it, he first asked, "What was the name of the person who
told you that?"; then, he said that, yes, NPIL had owned the plant in
the mid-1990s, and then he said, no, that was wrong, they didn't. I
called Agarwalla, and after another round of Twenty Questions, he
confirmed that, yes, NPIL did own the plant before Global Drugs.

5. Agarwalla told me he was unsure about the legal technicalities of
how Global Drugs had come into being. He said Global Drugs had sold
bulk ingredients to a variety of companies, but said he didn't have
the figures to show whether or not the plant's bulk drug output during
that period had supplied NPIL primarily.

Source:GNN